Bailey Adds to Pound's Woes With Strong Hint Bank of England to Keep Rates on Hold in November

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The Governor of the Bank of England has all but confirmed interest rates won't rise in November in comments that can add further pressure on the Pound.

In an interview with the Belfast Telegraph, Bailey said he was "encouraged" by UK inflation's direction: "It was not far off what we were expecting. Core inflation fell slightly from what we were expecting and that's quite encouraging."

He added that he expects a "real decline" in inflation to be recorded next month.

The comments are made after the ONS this week reported a slight tick higher in headline inflation to 6.7% year-on-year in September and core inflation to 6.1%.

Bailey's comments will add downside pressure to the Pound, which has fallen against both the Euro and Dollar this week, with fresh selling impetus following the release of some disappointing UK retail sales figures.

Retail sales fell by 1.0% in the year to September amidst elevated prices, according to data released Friday. Separately, the GfK consumer confidence survey also showed that consumer confidence plunged in October by 14 points.

Wages, meanwhile, undershot expectations when reported on Tuesday, adding to a tranche of evidence that there is little need for the Bank to hike rates again.

A rerating lower in expectations is, in turn, weighing on the Pound. The GBPEUR exchange rate is now down 0.20% on the day at 1.1450 and the GBPUSD exchange rate is down 0.26% at 1.2110.

"Barring any major surprises in next week's delayed LFS, we expect the MPC to keep Bank Rate unchanged at 5.25% in November," says Andrew Goodwin, Chief UK Economist at Oxford Economics.